SOMBA K'E/YELLOWKNIFE - The territorial government and the Department of Indian and Northern Affairs is supporting a diamond mine's bid to cut funding to the watchdog tasked with monitoring it.

Diavik Diamond Mines Inc. sent out a letter to the leaders of five aboriginal communities who are a part of the Environmental Monitoring Advisory Board on Nov. 5.

The letter is signed by Trish Merrithew-Mercredi, regional director general of Indian and Northern Affairs, Gary Bohnet, deputy minister of Environment and Natural Resources, and Kim Truter, president of Diavik.

It includes several recommendations, including using the money left over from previous budgets to reduce the money Diavik will give the advisory committee in the 2009-2011 and 2011-2013 budget periods, if funds still remain. That surplus amounts to $360,194. The other two recommendations concern reviewing the budget and assessing the environmental agreement that sets the terms for the board.

The advisory board is a non-profit organization that is supposed to operate at an arm's length from the mine and government. The board monitors the impact on land, air, wildlife and aquatic resources at the mine site on the East Island in Lac de Gras, NWT.

Todd Slack, with the land and environment division of the Yellowknives Dene First Nation, said the community wasn't supportive of the recommendations. He said time and money is being wasted while a decision is being made and he hopes the Department of Indian and Northern Affairs (INAC) moves ahead with mediation.

He questioned why the recommendations were being put forward by INAC, Diavik and the GNWT, with the exclusion of the aboriginal parties.

"As it's signed by all three parties, I think there is an implication that this is the preferred recommendation they want to use to solve this problem," he said.

He said allowing Diavik to reduce the money it gives to the board would reduce the board's independence.

"It's not encouraging for their watchdog abilities," he said. Slack added the board may need that flexibility to deal with unexpected financial needs – like expanding consultation work in communities.

"If they can't redistribute budgetary funds, then it significantly limits their ability to operate," he said. "It's an indirect method of limiting the independence of the board, but is it significant? Yes, it is," said Slack.

Bill Enge, president of the North Slave Metis Alliance, didn't dispute some of the recommendations in a letter sent to the monitoring board, but he didn't agree with the "arbitrary hold-back" of Diavik funds. Enge wrote any reduction in funding that could "adversely affect or be perceived to affect any of the programs relating to capacity building for involvement in the monitoring and management of the caribou" would "be met with strong community objections."

Doug Crossley, chair of the board, said the dispute about funding has been ongoing for 14 months but in the nine years he's worked with the board, Crossley said he's never received a letter with those three signatories.

"The issue is no surprise but when we got this revised (letter), determined to be an appropriate solution, from three of the non-aboriginal parties to the agreement, it really took us aback," he said, in an interview from Cambridge Bay.

He said previous to that letter, the dispute was always between Diavik and the board. Crossley had hoped INAC would consider funding a third party mediator.

Crossley said he didn't dispute all four recommendations in the letter, but said any challenge to the board's independence has to be avoided.

"From an environmental monitoring view, we'd be dead in the water," he said.

Teresa Joudrie, director of resources and environment with INAC, said the letter was signed by the three original funding partners, and said since they're all parties to the same agreement, she said it wasn't unusual for INAC to sign a letter with Diavik.

Joudrie said nothing would be finalized until the many parties respond to the letter. They have a Dec. 4 deadline. After that, INAC minister Chuck Strahl will decide how the dispute will be resolved.

"INAC is ultimately the decision marker for the budget," Joudrie said. She said she didn't think endorsing the recommendations in the letter eroded the minister's ability to make up his own mind.

"We're not trying to say it's the best response. What we're doing is we're bringing forward one of the recommendations," she said. "We wanted to find out from the rest of the parties if they felt the same way."

The GNWT, also a signatory on the letter, declined to comment on the issue.

Previous disputes over funding to the board came up when Diavik planned to shut down operations for six weeks due to the downturn in the economy and wanted to shut down the monitoring process at the same time. The board turned down that proposal last May.